Rainfall is the main driver of hydrological processes in dryland environments and characterising the rainfall variability and processes of runoff generation are critical for understanding ecosystem function of catchments. Using remote sensing and in situ data sets, we assess the spatial and temporal variability of the rainfall, rainfall–runoff response, and effects on runoff coefficients of antecedent soil moisture and ground cover at different spatial scales. This analysis was undertaken in the Upper Burdekin catchment, northeast Australia, which is a major contributor of sediment and nutrients to the Great Barrier Reef. The high temporal and spatial variability of rainfall are found to exert significant controls on runoff generation processes. Rainfall amount and intensity are the primary runoff controls, and runoff coefficients for wet antecedent conditions were higher than for dry conditions. The majority of runoff occurred via surface runoff generation mechanisms, with subsurface runoff likely contributing little runoff due to the intense nature of rainfall events. MODIS monthly ground cover data showed better results in distinguishing effects of ground cover on runoff that Landsat-derived seasonal ground cover data. We conclude that in the range of moderate to large catchments (193–36,260 km2) runoff generation processes are sensitive to both antecedent soil moisture and ground cover. A higher runoff–ground cover correlation in drier months with sparse ground cover highlighted the critical role of cover at the onset of the wet season (driest period) and how runoff generation is more sensitive to cover in drier months than in wetter months. The monthly water balance analysis indicates that runoff generation in wetter months (January and February) is partially influenced by saturation overland flow, most likely confined to saturated soils in riparian corridors, swales, and areas of shallow soil. By March and continuing through October, the soil “bucket” progressively empties by evapotranspiration, and Hortonian overland flow becomes the dominant, if not exclusive, flow generation process. The results of this study can be used to better understand the rainfall–runoff relationships in dryland environments and subsequent exposure of coral reef ecosystems in Australia and elsewhere to terrestrial runoff